Australian agribusiness export concern on Trump election

Posted by Ian Grinblat on 14th November 2016
Trump

Australian farmers are worried that the overtly hostile rhetoric of American President-elect Trump toward imports might close their second most-important market.

The US currently takes 11 per cent of Australia’s AUD $46 billion agrifood export trade which includes:

  • Beef AUD $3.1billion
  • Lamb AUD $601million
  • Goat meat AUD $155milion
  • Wine AUD $491million

Many times during the recent US Presidential election campaign, Trump said that he would “tear-up” the Trans-Pacific Partnership (TPP) which has not yet been implemented by the American Congress. He has also said he wants to renegotiate the North American Free Trade Agreement (NAFTA) which was signed by President Bill Clinton in December 1993.

Australian government ministers and Austrade spokespersons have said that Trump’s election poses no threat to the continuation of the 12-year old Free Trade Agreement (FTA) between Australia and the US.

Since this FTA was signed in January 2005, the two-way trade between Australia and the US has increased from AUD $41 billion to more than AUD $70 billion. By 2023, 98.4 per cent of US tariff lines are to be completely duty-free for Australian exporters to the USA.

However, the anticipated cancellation of the TPP will likely remove opportunities for international growth for Australian beef, dairy, grain and rice producers into US markets and also into the markets of the other ten countries who were to be parties to the TPP treaty.

Before the 2016 US election, the Australian sugar industry, which exports 80 per cent of its AUD $3 billion crop each year, was promised greater access to the high-priced US sugar market with a boost to exports projected from 85,000 tonnes per year to 150,000 tonnes.

Some farmers in the US are also displeased at the prospective cancellation of the TPP. Through their lobby group, American Farm Bureau, they have campaigned loudly in its support.

Paradoxically, Trump has in the past been a strong proponent of international trade but has also wanted to see American goods and services gain ascendancy in foreign markets.